How Is a Business Valuation Performed in an Illinois Divorce?

 Posted on March 20,2020 in Illinois Divorce

With all the issues your divorce might bring – child custody, child support, and more – the division of marital assets can seem especially complicated. If you and/or your spouse own a business, the proceedings can be even more complex. Illinois is an “equitable distribution” state, which means a court will determine how to split assets fairly instead of just dividing your and your spouse’s assets precisely in half. Therefore, you must have a business valuation conducted to accurately determine the company’s worth. To receive your fair share of this asset, it is important to hire an experienced divorce attorney, who, along with a financial professional, can ensure your rights are protected every step of the way.

What Valuation Method Is Best for My Business?

There is not a one-size-fits-all approach to valuating a business, and a forensic accountant along with a skilled lawyer will typically choose from these three methods:

• The market approach: With this method, an appraiser would look at what similar businesses were sold for recently and use those values as a reference.
• The income approach: In this case, an appraiser compiles your profit-and-loss statements, tax returns, and any customer contracts to determine your earnings in the near past and estimate what you are likely to earn in the near future.
• The asset approach: As it sounds, this method uses your business’ assets, accounts receivable, and enterprise goodwill, which is the value that your name or brand carries in the public’s eye. It is difficult to estimate this last item’s value, but that is why you need subject matter professionals to help you place a value on your business.

What If My Business Is Non-Marital Property?

Just because you acquired your business before your marriage does not mean that you do not need a proper valuation during your divorce. Your spouse may be eligible for some of those assets if you invested any marital funds in your business. For example, if you used $10,000 to renovate your retail space and you earned $20,000 in profit, your spouse could receive a portion of the initial investment and a portion of the profits.

Contact a Kane County Business Valuation Divorce Attorney

To prevent the court from suspecting that you are hiding assets, to keep the divorce negotiations balanced, and to receive a fair portion of your company, it is necessary to understand the value of your business. With the help of an experienced St. Charles divorce lawyer, you can protect your rights to marital property. The accomplished law firm of Weiler & Associates, Inc. have the resources and knowledge to accurately determine what your assets are worth. Call us today at 630-331-9110 to schedule your confidential consultation.

Source:

http://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm